Warner Bros.'s concurrent film releases require new success metrics, says the CEO
As the Covid-19 pandemic continues to turn the entertainment industry's book on its head, WarnerMedia's Ann Sarnoff is on the lookout for a new set of gauges for the industry – traditional checkout numbers are doomed.
Sarnoff, chairman and CEO of WarnerMedia's studios and networks division, said the linchpin for streaming and Warner Bros.'s move to release its 2021 roster for both streaming and theaters, " require completely different criteria in order to be understood What successful releases look like.
"Unless you are running ads, the eyeballs in this world are day by day less relevant to the general engagement of the service," Sarnoff said at a virtual keynote presentation at CES 2021 on Wednesday. “The amount you cost to acquire a subscriber, the monthly churn, how many people are leaving the service, what you can do to reduce churn and lower your acquisition costs – that's a completely different set of metrics than that Industry not made to measure. "
These new metrics are desperately needed in a year when Warner Bros. 17 films will hit both theaters worldwide and HBO Max in 2021 for subscribers at no additional cost. The industry-rocking decision that AT&T CEO John Stankey defended was made out of necessity, Sarnoff said.
"We turn to adapt to the environment in which we live," explained Sarnoff. “Do I wish the pandemic was over? Of course I do. But I have some amazing films that fans would love to see, and because so much of the market, especially in the US and now in Europe, is now closed – more than 60 percent of the theaters are now closed – you can don't just do it by launching in theaters. We needed an alternative platform. "
The decision also follows the traditional theatrical release of Christopher Nolan's thriller Tenet in late summer, although many theaters remained closed. While Stankey had previously hinted that the company was blown away by the tepid box office run of the $ 363 million title ("I can't say we said goodbye to the Tenet experience thinking it was a home run" (he said in October), Sarnoff said the studio was "pleased with the results" given the state of theaters and the challenges of marketing amid a pandemic.
“It's really difficult to spend the marketing that you have to spend and start running with certain cities opening and certain cities closing. You book your marketing eight weeks in advance so you have a moving target for how much the market will or will not be open, ”Sarnoff said. "We have just decided to be there for the long game and open the film."
Warner Bros. 2021 titles will hit theaters worldwide and generate some box office revenue in international markets where HBO Max, a service currently only available in the US, is not yet operational. And while the release schedule will almost certainly affect the box office numbers, it would affect the pandemic as well – and Sarnoff said box office numbers are no longer the best metric film studios can rely on.
"What the opening weekend is and was was an indicator of a film's success because there were formulas you could apply and then project ultimatums of what your film was likely to do," Sarnoff said. "Sometimes these formulas worked and sometimes they didn't. … But when more of the world is looking for streaming and proxies for success, there will be things we learn sooner."
What these metrics will look like remains to be ironed out by the industry, but the pressure to achieve this is already great.